JAPANESE RESPONSE TO APEC DEMARCHE

UNCLAS SECTION 01 OF 02 TOKYO 004260

SIPDIS

SENSITIVE
SIPDIS

STATE PASS USTR FOR CUTLER/NEUFFER

E.O. 12958: N/A
TAGS: ECON EAID APECO JA
SUBJECT: JAPANESE RESPONSE TO APEC DEMARCHE

REF: STATE 121653


1. (SBU) Summary: Japanese officials expressed support for U.S.
APEC goals set out in reftel, in particular, the completion of the
IPR model guidelines and extension of the mandate of the
Counter-terrorism Task force (CTTF). However, Japanese
interlocutors were cautious of plans to reinvigorate APEC
institutions, noting that any changes requiring increased financial
burdens will need detailed examination of new funding sources.
Likewise, officials expressed support for a "strong political
message" on resuming the Doha Round but were pessimistic about U.S.'
ability to renew "Fast Track" authority. Japan's 2006 APEC goals
include agreement on the IPR anti-counterfeiting guidelines,
progress on the Investment Liberalization and Facilitation Action
Plan, a part of the joint Japan-Australian "Behind the Border"
initiative, and implementation of a "One Village One Product" rural
development symposium. End Summary


2. (SBU) Emboff delivered reftel demarche on U.S. 2006 APEC
Priorities to Ministry of Economy, Trade and Industry (METI) APEC
Director Kunihiko Shinoda and Ministry of Foreign Affairs (MOFA)
APEC Director Hiroyuki Minami. Both expressed broad support for
U.S. goals and pledged continued close cooperation with U.S.
counterparts at September's third Senior Officials Meeting (SOM
III).

Counter-terrorism
--------------


3. (SBU) MOFA's Minami expressed unequivocal support for extension
of the CTTF mandate, although he noted that some economies continue
to object to part of the task force's agenda. He offered Japan's
continued engagement with those economies to move forward U.S. CT
goals. On the issue of a successor to the current chair, he
expressed surprise that General Defensor was stepping down but
offered no ideas on a replacement candidate.

Future of APEC
--------------


4. (SBU) The proposal for "Reinvigorating APEC" stimulated the
most active discussion. METI's Shinoda said Japan backed the
general idea of strengthening the functions of the Secretariat but
said there was not yet an internal consensus on how best to do that.
He noted that APEC members had put forward a variety of proposals
including establishment of an APEC "Chief Operating Officer".
Shinoda noted two areas of particular Japanese interest:
strengthening linkages between the Secretariat and academia with the
aim of producing better economic research and stronger, formal
linkages with the business community (e.g. ABAC) to assure that
private sector proposals have greater influence in APEC decision
making.


5. (SBU) MOFA's Minami had more concrete concerns. He concurred
with his METI colleague on support for strengthening APEC within the
context of improving Asia-Pacific "regional architecture" but noted
that any proposal for a permanent Executive Director or similar
position implied a greater financial burden that would need to be
covered by member economies. Until now, Japan and the United States
had been carrying the primary burden of APEC financing and, in
addition, Japan has made significant contributions to APEC's Trade
and Investment Facilitation (TILF) funds. Noting that Ambassador
Michalak had recently expressed concerns to MOFA Economic Affairs
Director General Ishikawa that Japan has not paid adequate attention
to strengthening APEC, Minami pushed back by pointing out that Japan
had long been a leader in APEC both through its financial
contributions and in other mechanisms. He expected that once again
at SOM III Japan's Senior Officials would support reinvigorating
APEC "in principal" but wanted a more detailed discussion on funding
sources and ways to reduce low-priority spending before it could
agree to create new permanent leadership positions. In reply,
emboff noted that the United States understood the likely need for
enhanced funding attached to any proposal to strengthen APEC
institutions and was already looking at options. The United States
did not want institutional reform efforts to unfairly burden any
single economy.

Doha
--------------


6. (SBU) METI's Shinoda agreed that the November APEC Trade
Ministerial provides an opportunity for members to issue a strong
political statement in support of restarting the Doha negotiations.
Japan would support such a move. However, both he and MOFA's Minami
expressed pessimism about the possibility of getting talks back on
track quickly. They noted that the uncertain outcome of this year's
U.S. midterm elections and the resulting difficulties in renewing
"Fast Track" authority made early resumption of negotiations
problematic.


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Technology, Facilitation and IPR
--------------


7. (SBU) As for the remaining specific U.S. initiatives Japan had
few objections. METI's Shinoda was most enthusiastic about IPR
initiatives. As one of the three co-sponsors, Japan is supportive
of the IPR model guidelines. It will also back the authorized
software proposal as soon as it can work through some minor issues
related to GOJ agencies' internal guidelines on IT security policy.
He also called the Pathfinder program on Technology Choice a "good
initiative" and noted that, following a GOJ interagency conference
call, last week Japan expects to support this proposal in Hanoi. On
the "single window" trade facilitation proposal, Shinoda was
marginally more cautious. Although Japan has initiated many trade
facilitation projects in APEC in the past, the Ministry of Finance,
which has authority over customs-related issues, has minor concerns
about implementation of the single window idea. Once the GOJ can
work through these, it is likely to be supportive.

Japan's APEC Priorities
--------------


8. (SBU) In addition to the IPR anti-counterfeiting guidelines
initiative, Shinoda noted two Japanese trade priorities for the
current year. First, within the context of reinvigorating APEC,
Japan would be looking for ways to strengthen linkages between the
Secretariat and private academic institutions such as a "study

SIPDIS
center consortium" to improve APEC's economic research capacity.
Japan would also like to see more formal linkages between the
private sector and the Secretariat to ensure that private sector
initiatives, such as those from ABAC, receive greater influence in
the organization's decision-making although he had no specific
proposal in that area yet. Second, he described in detail Japan's
proposals, in cooperation with Australia, for an "Investment
Liberalization and Facilitation Action Plan" to link a number of
existing initiatives that enhance cross-border investment. In
addition, he presented a draft outline for an APEC Small and Medium
Enterprise seminar, in cooperation with host Vietnam, to be held on
the sidelines of SOM III. The seminar, entitled "One Village, One
Product", would promote both regional tourism and local cottage
industries. MOFA's Minami meanwhile urged USG support for specific
programming under the joint Japan-Australia "Behind the Borders"
structural reform initiative.

SCHIEFFER